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Is Human Capital a Significant Determinant of Portugal’s FDI Attractiveness?

  • Ana Teresa Tavares


    (CEMPRE, Faculdade de Economia, Universidade do Porto)

  • Aurora A.C. Teixeira


    (CEMPRE, Faculdade de Economia, Universidade do Porto)

The paper tests whether human capital is a relevant foreign direct investment (FDI) determinant. Drawing on a large-scale survey of firms located in Portugal, and controlling for firms’ structural (i.e. size, age and industry), strategic (R&D and export intensities) and linkages (density of university contacts) variables, our key finding is that, indeed, human capital exerts a positive and significant influence on FDI attraction. Relevant policy implications emerge from the results of this study, at two main levels: (i) policies intended to stimulate human capital formation; and (ii) as regards FDI-focused policies. These policies are discussed in the light of the Portuguese case.

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Paper provided by Universidade do Porto, Faculdade de Economia do Porto in its series FEP Working Papers with number 211.

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Length: 28 pages
Date of creation: May 2006
Date of revision:
Handle: RePEc:por:fepwps:211
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  7. Aurora Teixeira & Joana Costa, 2006. "What Type of Firm Forges Closer Innovation Linkages with Portuguese Universities?," Notas Económicas, Faculdade de Economia, Universidade de Coimbra, issue 24, pages 22-47, December.
  8. Gary S. Becker, 1962. "Investment in Human Capital: A Theoretical Analysis," Journal of Political Economy, University of Chicago Press, vol. 70, pages 9.
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  16. Masao Nakamura & Pierre Mohnen & Cathy Hoareau, 2003. "What type of enterprise forges close links with universities and government labs? Evidence from CIS 2," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 24(2-3), pages 133-145.
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